The biggest scam of them all
Published 4:11 pm Thursday, October 5, 2023
If you want the true definition of a scam, then look no further than the United States Government and the North Carolina Government.
The scam comes in taxes…well not necessarily the initial wave of money withheld from our paychecks, but the several rounds of taxation that follow. Do you ever wonder why we pay tax on income that’s already taxed? And we get taxed again every time we use our already taxed income to make purchases.
Just to pour salt into an open wound, if you are late in paying your taxes, you have to pay “interest and penalties” (which are taxes on top of the taxes you are struggling to pay to begin with).
And it’s not just sales tax that we have to pay. If you have social vices such as nicotine and alcohol, then you have to pay special taxes on purchases of cigarettes and booze.
Even if you don’t smoke or drink, but do operate a motor vehicle then there’s a gas tax (aka Highway Usage Tax).
There’s also an Inheritance Tax, Corporate Tax, Inventory Tax, Luxury Tax, Recreational Vehicle Tax, and School District Tax.
If you want to see what other taxes you pay, take a look at the fine print on your land line telephone or cell phone bill. There you will find an array of taxes: Telephone Federal Excise Tax, Telephone Federal Universal Service Fee Tax, Telephone Federal, State and Local Surcharge Tax, Telephone Minimum Usage Surcharge Tax, Telephone Recurring and Non-Recurring Charges Tax, Telephone State and Local Tax, Telephone Usage Charge Tax, and an E-911 Charge.
And to think, we broke away from British Rule to avoid so many taxes.
Federal tax on Social Security income is another one that drives me batty. And what makes it worst is that old Joe Biden wants to toss a life raft to those who took out loans for their college education, but he – and the rest of the powers that be within Washington, DC – doesn’t bat an eye when it comes to providing tax relief to those already drowning in tax burdens.
This newspaper publishes a monthly column from Rusty Gloor, a certified Social Security advisor for the Association of Mature American Citizens. He was recently asked a question about the taxation of Social Security benefits, especially considering the fact that the Social Security FICA payroll taxes taken out of an individual’s paycheck while they are working were paid with taxable income.
Gloor confirmed that many Americans believe that that federal taxation of Social Security benefits is unfair because they pay into the program through payroll taxes on taxable earnings.
Social Security wasn’t viewed as taxable income until 1983, Gloor explained. That, he said, came at a time when Social Security was having financial issues.
“Congressional logic back then was that a beneficiary only personally pays 50 percent of the Social Security contributions made (the other half is paid by the employer) so, since your Social Security entitlement was only half paid for by you and the other half by your employer, the portion of your benefit attributable to your employer’s contributions should be taxable,” Gloor said. “So, it’s that other half – the portion of your benefit which resulted from employer contributions – which the 1983 Congress decided should be taxed. So, starting in 1984, if a beneficiary’s overall annual income from all sources exceeded $25,000 for a single filer or $32,000 for those filing married-jointly, half of that person’s Social Security benefits became part of their income taxable by the IRS.”
But now that share of the burden is even higher on a Social Security recipient.
Gloor noted that in 1993, Congress added another threshold which, if exceeded, resulted in up to 85 percent of Social Security benefits received during the tax year becoming taxable. The logic, he said, used for the 1993 law was that beneficiaries, on average, would only personally pay for about 15% of the lifetime benefits they would eventually receive, leading that Congress to conclude that if your combined income from all sources exceeded the higher threshold ($34,000 for single filers and $44,000 for those filing married/jointly), up to 85 percent of your benefits should be taxable.
Additionally, Gloor noted that the income thresholds for taxing Social Security benefits were established in 1983 and 1993, but those thresholds have never been adjusted for inflation.
“When taxation of Social Security started in 1984, less than 10 percent of beneficiaries paid income tax on their benefits, whereas today that percentage is over 50 percent and growing,” he said.
Meanwhile, politicians spend billions of taxpayer dollars on things that don’t impact you or me. Personally, I don’t think they understand just how large one billion really is.
A billion seconds ago was 1992.
A billion minutes ago the Roman Empire was at the peak of its power.
A billion hours ago our ancestors were living in the Stone Age.
A billion days ago no one walked on the earth on two feet.
At the current rate of government spending, the US Treasury had one billion dollars more than it did about six hours ago.
And, in closing, don’t trust the government to fully protect your private financial data.
As reported by the Associated Press this past Friday, a former contractor for the Internal Revenue Service was charged with leaking tax information to news outlets about thousands of the country’s wealthiest people.
Charles Edward Littlejohn, 38, of Washington, DC, is accused of stealing the tax return information and giving it to two news outlets between 2018 and 2020. He is charged with one count of unauthorized disclosure of tax returns and return information. He faces up to five years in prison if convicted.
The IRS declined to comment specifically on the case, but Commissioner Danny Werfel said “any disclosure of taxpayer information is unacceptable” and the agency has since tightened security.
If you believe that, see me for a deal on oceanfront property in Kansas.
Cal Bryant is the Editor of Roanoke-Chowan Publications. Contact him at email@example.com or 252-332-7207.